In the spirit of goodwill to all men for Christmas 2011, the following is an abridged reprint of what Andrew Perloff (Chairman of Panther Securities, a property company) had to say in defence of high earners earlier this year.  Mr Perloff’s full, unabridged, ”Chairman’s Ramblings” can be found here.

“The banking and related finance industry probably employs about 1,000,000 people.  The majority of them receive only slightly better pay and conditions than other private sector industries.  Those at the higher level are well paid.  Probably no more than one in two hundred of them receive the huge bonuses that appear to produce the jealous vilification so assiduously encouraged by politicians of every persuasion.

I have dealt with many of the banking industry and have found that the majority of those at the higher level are knowledgeable and dedicated to their organisation and work much harder and longer hours (often with more stressful work involved) than those in other industries.  The large bonuses they earn are a matter for the owners of the bank to decide i.e., the shareholders, not the government [except in the special case of RBS where the government is the majority shareholder - aot].

When a million pound bonus is mentioned one rarely hears the rest of the story, i.e., the Treasury receives £650,000 tax (including National Insurance) and from the remainder the recipient probably pays for his two children’s private education, almost certainly private medical insurance, employs a nanny and gardener, runs two expensive cars with high VAT tax rates, high road and fuel tax, thus probably providing approximately another £150,000 benefit to the country at large and drawing little from it.

Thus this single million pound bonus earner provides the pension for 150 little old ladies, wherewithal for 75 asylum seekers or pays for the education of 150 other peoples’ children.

Let us consider what would happen if the billion of bankers’ bonuses had not been paid.  The banks net income would rise by this amount only for LITTLE or NO tax to be paid as they have lost 10′s of billions on their tax loans and would be fully entitled to set off these losses against net income, ie, the treasury would be worse off in direct tax by a minimum of 4 billion pounds and probably a further 1 billion from indirect taxes – this is meaningful amounts even for the most spendthrift of Governments.

We are told that the top 10,000 taxpayers pay about 7% of the total income tax which I calculate as 2,500 times as much as if all earners were treated equally.

Provided it is earned outside of the public sector which we all pay for, that politicians and journalists should be shouting from the rooftops, we want more million pound bonuses, many more rich people and many more large incomes because the recipients pay exponentially more to allow the country to be munificent to those who are less well off rather than the current situation of frightening off 20,000 people to squeeze into Monte Carlo, Andorra, The Channel Islands, Switzerland, Luxembourg and little pimples of islands in the Caribbean.  They should be encouraged to return to our green and pleasant land with lower tax rates, flattery, respect and special privileges.  The extra taxes received and huge employment generated because of nil tax rates that could be offered to the lowest earners would transform a million more lives as they are taken out of the benefits trap.

This probably won’t happen as it is easier to obtain a vote by way of offering envy and confiscation from the deserving haves rather than reason and logic which might help the country.”